Battery jumps from 40% to 5% instantly?

Having a weird issue where my phone will display 40 or 50%, then suddenly drop to 5% and state that I need to plug it in. I have tried clearing the battery stats and the issue persists. It seems as though the phone is actually reading the battery status incorrectly. This is pure speculation, because it seems that the supposed 5% lasts for longer than I would assume.

What can I do to confirm the health of my battery and also ensure that the phone is reading the battery correctly?

Don't really want to try another ROM, so is there anything I can do short of buying a new battery to see if the problem persists?

Have you been keeping your phone in your pocket outside during cold weather? I know that most times when I've had my phone out in the cold weather it will do the same thing. It has to do with the electrons moving slower inside the battery so it drains your battery quicker than usual.

Sortof happens to me. Battery will read 40% left then I turn off the screen, then four hours later give or take I turn the screen on and it says 40% still, then I unlock the phone to use and it jumps to 15% left.

My battery last the same as it always though, I think it just needed to refresh the percentage.

let your battery drain and phone turn itself off, wipe batt stats.
plug in, charge all night, before taking off charger, wipe batt stats again
create a shortcut to batt usage from settings and check the next few days regularly.
after a week, batt stopped acting strange and batt usage read correctly.
this helped me alot.

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Don't you have to use your recovery program to wipe battery stats?

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yeah, I recommend clockworkmod
you can flash it free using rom manager, which is also free in the market
in my opinion it is imperative to have a recovery system in place
I would suggest d/ling rom manager from the market, flashing clockworkmod recovery (top option in rom manager) then using rom manager to do what I suggested

I been having same problem. I wipe battery stat still with the same result. Finally I tried a different and the problem was solved. I even reinstalled. Which really sucks because I really like this rom.